Valuation maximizing corporate value phần 4 pps

The analysis shows the relevant historical data and also calculates an average value or mean for several key percent- ages. Some analysts might weight performance closer to the most recent year higher, others might use compounding, as is done in bank accounts. Knowledge that a major account was just won or lost might suggest additional modifications to or treatment of the data. However, the purpose here is to simply demonstrate a starting point for value, based on actual data, not on anyone’s hopes or fears. Financial Inputs and Projections All of the inputs needed to compute five years of future cash flows for ABC Company are contained in the historical numbers and analysis thereof appearing in Exhibit 2.4. Specifically, these inputs are the most recent fiscal year’s revenues and the five-year annual averages for: ■ Percentage increase in revenues (6%) ■ Operating profit margin as a percent of sales (10%) ■ Tax rate as a percent of operating profit margin (40%) ■ Increase in net working capital investment as a percent of the increase in revenues (3%) ■ Increase in net fixed capital investment as a percent of the increase in revenues (4%) When the percentage increase in revenues is applied to the Year 0 revenue number (1000 increasing by 6% = 1060), the Year 1 projected revenue is generated. By increasing this number again by 6%, the Year 2 projected revenue is gener- ated. The result of using all the average annual percentages above creates five-year cash flow projections. Exhibit 2.2 46 CALCULATE CURRENT VALUE [...]... specialized approaches to solving their individual problems, the seams where one department interfaces with another are potential sources of problems For example, long-range plans created cannot always easily incorporate special situations such as acquisitions or major capital expenditures The top-level annual budget, incorporating all the lower-level budgets, does not always coincide with, and therefore, cannot... and significant clients are sometimes included with this group Some managements include these important contributors to the organization’s success in the internal partner world and seek their views and value their input in making important decisions Gather Additional Information 61 Profile Exercise After reviewing the definition of stakeholders and the various generic types with your management team,... can have a significant impact on your organization requires a fairly good working knowledge of its attributes and capabilities To ascertain a stakeholder’s key needs demands a sound understanding of its values and goals Accordingly, obtaining reliable data beyond that generated in internal team meetings may be necessary in order to answer important questions raised by meeting participants Additional information... elsewhere, as well as simply expedite the data collection process P rimary Sources Once a review of secondary sources is complete, it is possible more questions may arise and new hypotheses about the 64 ASSESS STRATEGIC LANDSCAPE environment and potential stakeholders may need to be tested Going to primary sources and obtaining additional information is generally the approach taken, one where the results . margin (40 %) ■ Increase in net working capital investment as a percent of the increase in revenues (3%) ■ Increase in net fixed capital investment as a percent of the increase in revenues (4% ) When. average annual percentages above creates five-year cash flow projections. Exhibit 2.2 46 CALCULATE CURRENT VALUE . ABC Company are contained in the historical numbers and analysis thereof appearing in Exhibit 2 .4. Specifically, these inputs are the most recent fiscal year’s revenues and the five-year annual